Two years ago, many Ontarians were caught off-guard when the last Liberal government removed the Ontario sales and property tax credits from the tax return. The move was part of the HST introduction and the old credits were bundled into the Ontario Trillium Benefit (OTB). Based on a single or family income, the OTB was actually more generous than the previous credits but was paid in monthly installments, rather than a lump sum when a tax return is filed.
After numerous complaints in the first tax filing affected by the change, there was speculation that the OTB would move back to a lump sum payment. However, the previous government said they had reviewed the options and decided it was best left as monthly installments.
The new Liberal government in Ontario has now reintroduced the lump sum idea in its latest budget documents. But it comes with a twist. The OTB will continue to be separate from the tax return but recipients will have the choice to stick with the monthly installment or a lump sum. It may seem like an easy decision but taking the lump sum means you have to wait for it.
If you have two different Ontario taxpayers filing a 2013 tax return that results in a $1,200 Ontario Trillium Benefit, what happens if one opts for monthly installments and the other for a lump sum? The taxpayer taking the monthly instalments will receive the first $100 payment in July 2014 and the last in June 2015. The taxpayer choosing the lump sum will have the entire OTB paid in June 2015. This allows taxpayers the flexibility of determining how they want to be paid.
If your OTB is $360 or less for the year, you already receive it as a lump sum payment at the beginning of the benefit period. That will not change under the new system so, for a 2013 tax return, the payment would be received in July 2014.
Remember, the Ontario budget is still in the legislature and needs to be passed before the changes come into effect. But if you prefer to receive one large payment of the OTB, you may have that option when you file your 2013 tax return.
